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Hon.   Niles  S earls, 

Chairman  Committee  on  Corporations 
in  Senate. 

Sir:  The  Senate  Committee  on  Corporations, 
of  which  you-  are  chairman,  having  decided  .  to 
grant  a  hearing  to  the  Commissioners  of  Trans- 
portation on  the  railroad  bills  now  under  con- 
sideration, I  address  some  observations  on  them 
to  yourself  in  this  form,  in  the  hope  that  some 
of  the  members,  individually,  may  find  the  neces- 
sary leisure  to  consider  them. 

These  bills  are  five  in  number,  viz:  the  four 
prepared  by  the  Commissioners  of  Transporta- 
tion, and  which  were  introduced  in  the  Senate 
some  weeks  since,  and  Assembly  bill  No.  541. 
This  last  having  passed  the  lower  house,  will, 
doubtless,  be  taken  as  the  basis  of  any  legislation 
to  be  adopted,  and  on  it,  therefore,  the  following 
observations  are  offered.  It  has  been  made  up  by 
copying  the  act  of  April  3,  1876,  omitting  pro- 
visions tending  to  an  efficient  inspection  of  the 
business  of  the  corporations,  and  adding  sundry 
sections  from  the  bills  recommended  by  the  Com- 
missioner's. Of  its  forty-one  enactive  sections  (I 
omit  the  repealing  and  the  "take  effect  immedi- 
ately" sections  from  the  count),  thirty-seven  are  of 


Htimi 


the  character  indicated,  and  three  only  are  original 
(Sections  17  and  20,  of  Chapter  I,  and  Section  9, 
of  Chapter  II),  though  some  trivial  changes  are 
introduced  in  the  copied  sections.  Its  faults  be- 
ing mainly  of  omission,  I  shall  deal  with  those 
first,  and  with  all  possible  brevity. 

I.  Conspicuous  is  the  omission  to  provide  that 
the  new  Commissioner  of  Transportation  shall  be 
deemed  the  legal  successor  of  the  Board  legis- 
lated out  of  office.  You  are  aware  that  several 
actions  of  mandamus  were  brought  to  compel 
railroad  companies  to  afford  statistical  information 
demanded  by  the  present  Commissioners,  and 
which  they  had  refused  to  furnish.  These  actions 
are  pending  in  the  Supreme  Court,  on  appeal  from 
judgments  rendered  below,  in  favor  of  the  State. 
They  were  set  for  argument  for  December  3d  last, 
but  postponed,  and  finally,  by  consent,  set  down 
for  hearing  on  March  4th.  On  that  day  they 
were  pressed  by  the  counsel  for  the  Commission- 
ers, but  postponed  a  week,  at  the  instance  of  the 
railroad  companies.  On  Monday,  the  nth  inst., 
when  they  again  came  up,  the  same  counsel  ap- 
plied to  continue  them  for  the  term,  on  the  ground 
that  one  branch  of  the  Legislature  had  passed  an 
act  abolishing  the  Commission,  and  the  other 
would  probably  concur !  The  Court,  thus  called 
upon  to  discount  the  action  of  the  Senate,  did  not 
hesitate  to  do  so,  and  postponed  the  cases  for  the 
term.     But  that  serious  public  business   is  con- 


cerned,  the  comic  nature  of  this  proceeding  would 
not  fail  to  attract  attention. 

The  information  demanded  in  these  suits  was 
deemed  by  the  Commissioners  highly  material  to 
guide  legislation.  The  District  Court  was  of  the 
same  opinion,  and  adjudged  that  it  should  be  fur- 
nished. The  effect  of  creating  a  new  commission 
and  destroying  the  old,  without  provision  for  legal 
succession,  will  be  to  abandon  these  suits  wherein 
judgments  have  already  been  rendered  in  favor  of 
the  State,  and  practically  to  declare  it  preferable 
to  legislate  in  ignorance  of  material  facts  than 
with  knowledge  of  them.  '  To  avoid  this  absurd 
result,  it  will  only  be  necessary  to  amend  the  first 
section  of  the  bill  so  as  to  read  "Hereafter  there 
shall  be  but  one  Commissioner  of  Transportation, 
who  shall  be  the  legal  successor  of  the  present 
Board  of  Commissioners  of  Transportation,  and 
who  shall  possess  the  powers  and  discharge  the 
duties  herein  imposed  and  described. 

II.  Section  8  of  Chapter  I  of  the  bill  enumer- 
ates the  details  of  information  required  to  be  fur- 
nished by  railroad  companies  in  their  annual  reports. 
It  is  a  substitute  for  Section  3  of  Commissioners' 
bill  No.  I.  The  details  are  in  each  case  taken  from 
the  same  source,  viz:  the  form  of  report  adopted 
by  the  Massachusetts  Commission.  The  differ- 
ence between  them  is  just  this;  that  whereas  the 
Massachusetts  form  is  not  enacted  in  a  statute,  but 
is  contained  in  a  blank  prepared  by  the  Commis- 


sioners,  is  accompanied  by  notes  explanatory  of 
its  intent,  and,  if  not  properly  understood,  is  sub- 
ject to  further  oral  explanation  by  the  authority 
which  issued  it,  these  bills  put  the  form  itself  into 
the  statute.  In  Commissioners'  bill  No.  i,  the  lan- 
guage was,  wherever  necessary,  changed  from  that 
appropriate  to  a  blank  form,  which  is  to  be  inter- 
preted by  the  officer  who  prepared  it,  to  that  ap- 
propriate to  a  statute,  which  must  be  construed 
by  a  Court  of  law.  In  Assembly  bill  No.  541  this 
precaution  has  been  wholly  omitted,  and  the  result 
has  been  to  produce  an  enactment,  a  large  part  of 
which  a  Court  would  be  compelled  to  pronounce  un- 
intelligible and  incapable  of  any  legal  interpretation. 
For  examples  of  this  see  Section  8,  lines  52,  63, 
64,  65,  66,  69,  88,  89,  90,  91,  92,  93,  118,  135, 
137,  141,  181,  201,  and  many  more  which  might 
be  cited,  as  destitute  of  the  legal  signification  they 
were  intended  to  bear.  What  sort  of  a  general 
balance  sheet  can  possibly  be  constructed  out  of 
the  items  under  that  head?  Lines  227  to  237. 
What  is  the  legal  meaning  of  "freight  cars,  in- 
cluding coal,  on  a  basis  of  eight  wheels "  (line 
317)?  What  of  the  term  "  balance  of  mileage  and 
passenger  cars  "  (line  1 68)  ?  What  of  "damages 
and  gratuities  freight"  (line  172)?  These  and 
like  inquiries  without  number,  which  might  be  put 
illustrate  the  utter  worthlessness  of  the  section, 
in  its  present  form,  to  elicit  the  information  which 
its  author  must  be  presumed  to  have  deemed  de- 
sirable. 


These  and  other  omissions  equally  notable  have 
arisen  from  copying  with  servility,  a  document 
which  it  is  but  charitable  to  suppose  was  not  un- 
derstood. The  Massachusetts  form  is  good,  but 
the  scope  and  details  of  its  inquiries  are  adapted 
to  the  railroads  of  that  State,  which  are  of  mode- 
rate length,  extend  through  a  country  of  reasona- 
bly even  topography  and  density  of  population, 
and  are  at  various  points  connected  with,  and  de- 
pend for  their  business  on  other  roads  out  of  the 
State.  To  adapt  that  'form  to  our  State,  regard 
must  be  had  to  the  difference  in  the  character  of 
our  great  roads.  These  have  been  made  up  by 
the  consolidation  of  several  different  companies, 
and  consist  of  several  different  roads,  each  having 
its  proper  and  separate  business.  The  topogra- 
phy of  the  country  through  which  they  extend  is 
extremely  diversified,  and  but  one  of  them  has 
any  connection  without  the  State.  Statistics  of 
the  operations  of  these  roads  which  mingle  the 
business  of  their  several  branches  and  subdi- 
visions into  one  rude  and  undigested  mass — as  in 
the  section  under  consideration — are  simply  worth- 
less. To  give  them  value  they  should  be  called 
for  and  furnished  separately  as  to  each  separate 
branch  or  subdivision  of  each  road,  as  is  done  in 
Section  3  of  Commissioners'  bill  No.  1. 

The  remedy  is  to  amend  Section  8  of  Chapter 
I,  by  substituting  the  last  mentioned  section  for  it. 

III.  Section  9  of  Chapter  I   gives  the  commis- 
sioner  power    to    scrutinize  the    books,  &c,    of 


6 

railroad  companies  and  examine  their  officers  on 
oath.  Attention  having  been  called  in  our  report 
to  the  ineffiiciency  of  this  provision,  unaccompan- 
ied by  process  to  compel  the  attendance  of  wit- 
nesses and  the  production  of  books  and  papers,  it 
would  seem  superfluous  here  to  do  more  than  re- 
fer to  it.  If  the  omission  of  this  necessary  power 
was  the  result  of  inadvertence  in  drawing  the  sec- 
tion, the  defect  can  be  supplied  by  substituting  for 
it  section  5  of  Commissioners'  bill  No.  1. 

IV.  Attention  was  also  called  to  the  necessity  of 
making  false  swearing  in  the  case  of  railroad  re- 
ports or  examinations  punishable  as  perjury.  By 
the  provisions  of  the  Criminal  Code  such  is  not 
the  case.  To  remedy  this  defect  section  36  of 
Commissioners  bill  No.  1  was  prepared  and  should 
be  added. 

V.  A  more  remarkable  omission  in  the  bill  as 
printed  for  the  use  of  the  Senate,  occurs  at  the 
end  of  section  10  of  chapter  I.  This  section  (ac 
cording  to  the  proceedings  of  the  Assembly  as 
reported  in  the  Record-Union)  was  introduced  as 
an  amendment,  on  motion  of  Mr.  Tuttle,  of  So- 
noma, and  as  then  published  it  contained  the  fol- 
lowing additional  words,  viz  :  "  The  Governor  shall 
cause  to  be  printed  for  distribution  2500  copies  of 
said  report."  These  important  words  have  since 
disappeared  from  the  section  in  the  printed 
bill  now  on  Senators'  files.    How,  by  whom,  or  by 


what  authority  the  change  has  been  made,  I  know- 
not,  but  its  importance  will  readily  be  perceived. 
A  leading  object  of  collecting  these  railroad  sta- 
tistics, is,  by  giving  them  extended  publicity,  to 
draw  attention  to  defects  and  abuses  and  elicit 
comments  and  remedial  suggestions.  If  the  in- 
formation, when  gathered,  is  to  be  buried  in  manu- 
script in  the  office  of  the  Commissioner,  it  can 
elicit  no  criticism  save  from  that  officer.  Pub- 
lished and  scattered  abroad,  it  is  examined  and 
commented  on  by  hundreds  of  experts  throughout 
the  country.  Every  public-spirited  citizen  may 
become  a  voluntary  aid  to  the  Commissioner. 
From  what  has  been  said  it  will  appear  that  if  this 
bill  No.  541  is  to  remain  unchanged  in  the  partic- 
ulars noted,  its  title  might  appropriately  be  amend- 
ed so  as  to  read,  "  An  Act  to  limit  information  of 
the  operations  of  railroad  companies  in'  this  State 
to  what  they  may  see  fit  to  furnish,  and  to  sup- 
press it  when  obtained!" 

VI.  The  bill  incorporates  all  the  police  regula- 
tions proposed  by  the  Commissioners,  favorable  to 
railroad  companies,  with  the  remedies  appropri- 
ate to  them.  It  also  includes  a  few  of  those  which 
might  operate  as  restraints  upon  them,  but  in  re- 
spect to  the  latter  omits  to  provide  remedies.  This 
omission  (doubtless  inadvertent)  might  be  supplied 
by  adding  section  35  of  Commissioners  Bill  No. 
1,  and  section  3  of  Bill  No.  2  at  appropriate  places. 


8 

VI  I.  An  error  of  some  importance  occurs  in  sec- 
tion 7  of  chapter  i  of  the  bill.  The  tariffs  required 
to  be  filed  with  the  Commissioner  and  County 
Clerks  (line  9)  are  those  which  were  u  lawfully  in 
force'  on  January  1st,  1878.  But  those  established 
as  the  maximum  (line  1 7)  are  such  as  were  in  actual 
use  on  the  same  date.  By  reference  to  paragraph 
18,  (p.  9)  of  the  Commissioners  report  it  will  be 
seen  that  those  actually  in  use  between  the  anchor- 
age at  Wilmington  and  Los  Angeles  are  two  and 
a  half  times  greater  than  Aose  lawfully  in  force  be 
tween  the  same  points.  If  it  is  intended  to  legal- 
ize thisadvance  in  rates,  "it  were  an  honest  action 
to  say  so"  plainly.  If  not,  the  mistake  should  be 
corrected. 

VIII.  Many  other  omissions  might  be  pointed 
out  of  provisions  which  "plain  people"  would  deem 
salutary,  such  as  those  to  be  found  in  sections  20, 
23,  26,  27,  32,  34,  40  and  41  of  Commissioners  Bill 
No.  1,  but  as  these  were  before  the  Assembly 
when  considering  the  bill,  and  have  not  been  in- 
serted, it  must  be  presumed  they  were  not  deemed 
desirable  ;  hence  I  omit  all  reference  to  them,  and 
come  to  the  new  sections  in  that  under  examina- 
tion. Section  9  of  chapter  II.,  which  authorizes 
any  person  to  complain  to  the  Commissioner  of  vi- 
olations of  law  by  railroad  companies,  and  requires 
him  to  investigate  the  case,  is  very  well,  and  might 
be  of  some  value  If  any  power  were  given  him  to 
remedy  abuses  when  discovered.     In  the  absence 


of  such  provision  it  becomes  simply  what  Mr. 
Benton  called  a  "  stump  speech  in  the  belly  of  the 
bill,"  harmless  and  useless. 

The  other  new  provision  is  contained  in  section 
1 7  of  chapter  I.  and  purports  to  authorize  the  Com- 
missioner on  complaint  made  to  him  of  the  rates 
of  transportation  established  by  any  railroad  com- 
pany to  make  such  reduction  thereof  as  may  be 
just.  If  this  section  means  only  to  authorize  a  re- 
duction in  any  particular  bill  of  charges,  to  the 
rates  established  by  law  (an  interpretation  which, 
though  strained,  might  perhaps  be  given  to  it,  "  ut 
res  majus  valeat")  it  is  as  harmless  and  will  prove 
as  ineffective  as  that  last  cited ;  but  if,  as  its  lan- 
guage imports,  it  is  intended  to  confer  on  the  Com- 
missioner, power  to  establish  tariffs  of  freight  and 
fare  such  as  he  shall  deem  just,  it  may  well  be 
characterized  as  one  of  the  most  extraordinary  pro- 
visions that  ever  found  its  way  into  a  statute. 
Doubtless  under  existing  decisions  the  Legislature 
can  itself  enact  a  tariff  of  freights  and  fares  ;  but 
that  any  man,  outside  of  Bedlam,  should  suppose 
that  such  transcendent  power  could  be  imparted  to 
a  subordinate  executive  officer,  who  has  not  even 
the  power  to  summon  a  witness  before  him,  passes 
belief.  The  author  of  the  provision  may  be  able  to 
explain  its  intent ;  for  my  part  I  refrain  from  even 
conjecture  on  the  subject,  lest  I  should  be  drawn 
down  to  the  low  level,  to  which  some,  in  discussing 
these  bills  have  descended,  of  unwarranted  imputa- 


10 

tion  on  the  acts  and  motives  of  persons  unknown 
to  me,  and  who  have  no  opportunity  of  reply. 

IX.  The  only  other  new  provision  is  that  which 
gives  to  the  Commissioner,  the  Attorney- General  for 
his  legal  guide,  and  authorizes  that  officer  to  "  take 
control  of"  the  prosecution  of  any  action  or  pro- 
ceeding commenced  by  any  district  attorney  under 
the  act.  This  provision  not  only  casts  upon  an 
already  overburthened  public  officer  new  duties  of 
great  extent,  but  gives  him  a  supervising  power 
over  the  acts  of  the  Commissioner,  hardly  consistent 
with  the  proper  responsibility  of  the  latter  officer. 
He  may,  indeed,  commence  a  prosecution,  but  un- 
less the  Attorney-General  deems  its  continuance  to 
be  required  by  the  public  interest,  he  can  discon- 
tinue it.  All  responsibility  for  such  cases  is,  there 
fore,  shifted  from  the  Commissioner,  whose  business 
it  is,  to  the  attorney-General,  whose  duties  are  of  a 
wholly  different  character.  There  may  be  propri- 
ety and  good  sense  in  this  confusion  of  duties,  but 
I  confess  myself  unable  to  see  it. 

X.  I  n  concluding  these  observations,  I  solicit  your 
attention,  and  that  of  all  the  members  who  may  do 
me  the  honor  to  read  this  paper,  to  the  fact  that  no 
attempt  is  made  in  the  measure  which  has  passed 
the  House,  to  grapple  with  the  question  of  exces- 
sive fares  and  freights,  so  long  the  subject  of  pub- 
lic complaint,  and  to  a  remedy  for  which  a  majority 
of  the  Legislature    is  said  to  be   pledged.     The 


11 


Commissioners  report  points  out  the  objections  to 
statutory  rates  of  charge,  and  expresses  the  belief 
that  the  object  desired  can  best  be  accomplished  by- 
prescribing  general  principles  of  justice  and  equal- 
ity, to  which  railroad  tariffs  shall  conform,  and  leav- 
ing details  to  the  operation  of  the  natural  laws  of 
trade.  The  disfavor  with  which  the  work  of  the 
Commission  has  been  received  by  the  railroad  com- 
panies, together  with  their  refusal  to  state  any  facts 
or  offer  any  argument,  in  opposition  to  the  mode  of 
regulation  proposed,  shows  pretty  clearly  that  the 
right  method  of  reform  has  been  discovered ;  one 
which  without  doing  injustice  to  the  companies,  will 
relieve  the  public.  Towards  this  desirable  object 
the  Commission  presented  two  measures  as  alter- 
natives (Commissioners'  Bills  Nos.  3  and  4.)  The 
former  prescribed  a  system  complete  in  itself  and 
which,  when  properly  understood,  appears  just  and 
reasonable,  though  its  details  may  perhaps  need 
amendment.  In  view,  however,  of  the  extent  of 
the  innovation  ;  the  peculiar  present  circumstances 
of  some  of  our  roads;  the  exceptionally  unfavorable 
season  of  last  year;  the  great  outlay  attending  the 
construction  of  the  Southern  Pacific  railroad  to  the 
Colorado  river,  and  the  legislation  pending  in  Con- 
gress looking  to  another  overland  route,  I  can  well 
understand  that  legislators  should  hesitate  before 
undertaking  so  thorough  a  change  at  the  present 
time.  But  it  does  not  follow  that  because  thorough 
reformation  is  premature  a  partial  one  should 
not  be  attempted.     Commissioners'  Bill  No.  4  pre- 


12 

sents  the  other  alternative.  Its  principle  is  simple, 
and  if  restricted  in  its  operation  to  domestic  crops, 
it  would  be  a  perfectly  safe  experiment,  confer  an 
inestimable  benefit  on  the  producers  of  the  State, 
without  injuring  any  of  the  railroads,  and  probably 
without  even  appreciably  impairing  their  receipts. 
It  proposes,  briefly,  the  separation  of  terminal  from 
movement  charges;  that  the  former  be  made  uni- 
form on  like  lots  of  like  commodities,  and  the  latter, 
to  or  from  all  points  on  navigable  water  be  fixed  at 
equal  rates  per  mile.  This  measure  (Assembly 
Bill  No.  228)  has  never  been  acted  on  in  the 
House,  but  rests  in  the  womb  of  the  Committee 
on  Corporations  of  that  body.  If  it  be  deemed,  by 
any,  too  stringent,  let  it  be  amended  by  omitting 
the  third  and  fourth  sections  and  confining  the*sec- 
ond  to  the  crops  of  the  State,  and  it  will  still  be  a 
measure  which,  without  doing  the  slightest  in- 
justice to  the  railroad  companies,  will  give  in- 
finite relief  to  the  distressed  farmers  of  the  valley 
of  California.  At  present  the  companies,  by  their 
tariff,  practically  say  to  them,  We  will  not  transport 
your  crops  to  market  at  Marysville,  Sacramento  or 
Stockton  unless  you  pay  us  the  full  price  of  taking 
them  all  the  way,  on  to  San  Francisco;  nay,  in  addi- 
tion, we  insist  on  being  paid  for  the  further  service, 
useless  to  you  though  it  be,  of  raising  them  500  feet 
perpendicularly  in  the  air  and  letting  them  down 
again ;  for  such  is  the  grade  over  the  Western  Pa- 
cific road.     The  injustice  of  this  discrimination  is 


13 

so  obvious  that  its  defence  has  never,  so  far  as  I 
am  aware,  been  attempted,  and  it  appears  to  me 
indefensible. 

I,  therefore,  suggest  that  as  an  additional  amend- 
ment to  Assembly  Bill  No.  541  you  insert  in  the 
second  chapter  thereof  the  first  and  second  sec_ 
tions  of  Commissioners'  Bill  No.  4,  the  latter  being 
amended  so  as  to  read  as  follows  : 

Sec.  2.  In  till  cases  where  a  railroad  reaches  naviga- 
ble water  at  more  than  one  point,  or  reaches  more  than 
one  city  or  town  situate  on  navigable  water,  the  com- 
pany operating  such  road  shall  furnish  transportation 
over  it  for  the  crops  or  products  of  this  State,  to  an}T 
one  of  such  points,  towns,  or  cities,  at  the  option  of  the 
party  requiring  the  same,  at  the  lowest  rate  per  mile  for 
movement  charges,  which  shall  be  charged  for  like  trans- 
portation over  such  road  to  or  from  any  other  such  point, 
city,  or  town. 

By  the  amendments  I  have  suggested,  Assem- 
bly bill  No.  541  may  be  made  a  measure  of  sub- 
stantial reform  ;  in  its  present  form  it  appears  a 
burlesque  on  remedial  legislation.  *,  y^ 

X.  As  we  are  continually  referred,  in  the  discus- 
sion of  these  railroad  questions,  to  the  experience  of 
Massachusetts,  and  Mr.  Adams'  Oshkosh  lecture 
is  constantly  quoted "  to  prove  that  there  is  no 
remedy  for  railroad  abuses,  save  public  opinion, 
and  that  it  is  entirely  effective  for  all  purposes,  I 
may  be  pardoned  for  adding  a  few  words  in  reply. 
Massachusetts  is  a  State  destitute  of  navigable 
rivers.  No  competition  with  railroad  transporta- 
tion is  there  possible.   The  railroads  there  are  owned 


14 

by  various  companies  each  having  a  numerous  body 
of  shareholders,  who,  mingling  with  and  forming 
parts  of  society,  are  amenable  to  social  influences 
and  to  public  opinion.  In  these  two  respects,  not 
to  mention  others  almost  equally  important,  our 
situation  is  directly  the  reverse.  Our  roads  are 
owned  by  a  very  few  individuals,  to  whom  corpo- 
rate organization  is  merely  a  convenient  form  of 
partnership.  Public  opinion,  unless  developed  to 
a  point  which  threatens  legislative  interference  or 
civil  commotion,  has  no  necessary  influence  on 
them.  Our  State  is  traversed  by  two  great  navi- 
gable streams,  and  its  coast  for  seven  hundred 
miles  is  bathed  by  the  waters  of  a  placid  sea,  admit- 
ting competitive  means  of  communication  be- 
tween all  leading  points.  To  prevent  oppressive 
rates  of  transportation  by  railroads,  we  have  but 
to  require  them  to  abstain  from  discriminating 
against  localities.  For  my  own  part  I  would 
rather  trust  for  relief  to  such  a  law  alone,  than  to 
any  legislative  maximum,  or  other  arbitrary  re- 
striction of  trade  ;  for  such  a  law  is  demonstrably 
just,  and  once  enacted,  could  never  be  repealed. 

I  am,  sir,  very  respectfully, 

Your  Obedient  Servant, 

John  T.  Doyle,         , 

Commissioner  of  Transportation. 

San  Francisco,  March   18th,  1878. 


